Posts Tagged ‘free trade agreement’

Olivia Kantor recently completed an internship in the International Trade Administration’s Office of South America.

A long, narrow country in South America with a relatively small population of 18 million, Chile may not be the first country that comes to mind when considering export markets.

However, Chile’s dynamic economic growth, open markets, and world-class industries make it an attractive option for U.S. companies looking to sell their product abroad.

Chile is the United States’ fourth-largest trading partner in Latin America, and U.S. exports to Chile reached $17.6 billion in 2013. Trade with the country has increased nearly six-fold since the establishment of the U.S.-Chile Free Trade Agreement.

Several key industries in Chile have produced growing markets for U.S. goods and unique opportunities for business investment:

Electrical Power Equipment: Chile has the highest energy costs in South America. Efficient, affordable energy sources are at a premium as the Chilean economy continues to expand. Between 2013 and 2020, growth rates of 6 to 7 percent are projected for electricity consumption in Chile, and an estimated $20 billion of foreign investment and electrical power equipment will be needed to complete a variety of energy generation and transmission projects. Additionally, Chile plans to invest in many forms of renewable energy, making it an ideal market for U.S. manufacturers in that industry.

Construction: Driven by energy projects and investment in the Chilean mining industry, construction in Chile has grown at record rates. Construction within the mining industry alone is expected to total $50 billion during the next several years. With little construction equipment produced domestically, Chile relies on high-quality machinery from the United States. That puts U.S. businesses in an ideal position to take advantage of the wave of new construction projects, particularly in infrastructure and housing.

Agricultural Machinery and Equipment: Chile’s export-driven agricultural industry is looking to boost productivity and efficiency, providing a unique opportunity to U.S. exporters of specialized and energy efficient agricultural machinery. Continued demand for sophisticated agricultural machinery is expected to grow 7 to 8 percent through 2015. Demand is especially high for harvesting machinery, irrigation infrastructure, and precision agriculture equipment.

Many other Chilean industries also offer significant opportunities for U.S. exporters. You can find a complete list of best prospect sectors for Chile in the Country Commercial Guide. The US- Chile Free Trade Agreement allows U.S. firms to export with fewer barriers than many other markets. In addition, Chile continues to strengthen its commitment to liberalizing trade as a founding member of both the Trans-Pacific Partnership and the Pacific Alliance.

If your company is interested in learning more about doing business in the Chilean market, the Look South initiative offers a number of services to help U.S. businesses capitalize on these exciting opportunities, from business matchmaking to trade counseling.

There are also a number of events for companies eager to start making connections in Chile and beyond.

Contact your nearest Export Assistance Center to learn more about how you can take advantage of opportunities in Chile and 11 U.S. free trade agreement partner countries in Latin America!

John Larsen is the Deputy Director of the Trade Promotion Coordinating Committee Secretariat.

Department of Commerce data show that U.S. goods and services exports set a record for the fourth consecutive year, reaching $2.3 trillion in 2013.

U.S. companies that export to our 11 free trade agreement partner countries in Latin America played a major role in this success. Through the Look South campaign, federal trade-promotion agencies hope to help more companies find success by taking advantage of these free trade agreements.

In 2013, U.S. goods exports to Look South markets increased $12.5 billion to $312.6 billion – more than double the 1.7 percent rate of growth for goods exports to the rest of the world.

This isn’t just a blip; we see a clear growth trend as market liberalization, growing middle class consumption, and diversifying industrialization by Latin American markets fuels healthy economic growth and import demand.

As U.S. exporters respond, the Look South markets’ share of total U.S. goods exports has steadily grown from 17 percent in 2009 to 20 percent in 2013.

Here are some more interesting facts about our exports to free trade agreement partners in Latin America:

U.S. goods exports to Colombia, Mexico, Panama, and Peru have increased every year since 2009;

Exports to Mexico grew by more than $10 billion – nearly 5 percent – in 2013;

The $57 billion in combined U.S. exports to Chile, Colombia, Panama, and Peru would rank them as our 5th largest export market behind Japan and ahead of Germany; and,

The $29 billion in combined U.S. exports to the six remaining Look South markets – Costa Rica, Dominican Republic, El Salvador, Guatemala, Honduras, and Nicaragua — would rank them just behind France or Singapore.

We love talking about this data, but we love it more when we can help U.S. companies act on the data and find success!

The Look South website can help your business find the on-the-ground opportunities. You can also see market snapshots by industry with “Best Prospect Sectors.”

Moshtayeen Ahmed recently completed an internship in the International Trade Administration’s Office for Export Policy, Promotion, and Strategy.

Ambient Technologies is a U.S. exporter providing support in environmental and engineering fields.

Florida-based Ambient Technologies is one of many U.S. companies looking south and finding new business opportunities.

Ambient provides a number of support services to companies and government organizations in environmental and engineering-related fields, including drilling, surveying, and mapping. With operations in Florida, the Gulf Coast, Central America, and the Caribbean, the business is well positioned to take advantage of opportunities throughout Central America.

The Look South campaign is helping companies take advantage of abundant business opportunities that exist throughout Latin America. For Ambient, prime opportunities exist in Panama, where the company is supporting the Panama Canal expansion.

“Over the past few years, our work with the Panama Canal expansion has continued to drive our export sales—and we expect to see even more opportunity,” said Ambient President and CEO Carlos Lemos.

The growing economies of Latin America mean more opportunities for your business as well. U.S. free trade agreements in the region can also mean a simpler export process and lower costs of doing business.

“The United States has 11 free trade agreements in Latin America, which is one reason we’ve been encouraging so many Florida business to look at those markets,” said Sandra Campbell, director of the International Trade Administration’s Export Assistance Center in Clearwater.

If you’re ready to explore opportunities for your business in Latin America, visit your nearest Export Assistance Center or export.gov/looksouth.

Eduard Roytberg is a Senior International Trade Specialist at the International Trade Administration’s Export Assistance Center in Ontario, California. He is the leader of ITA’s Commercial Service Global Automotive Team.

The U.S. Commercial Service’s auto team is dedicated to increasing U.S. automotive exports and supporting American automotive manufacturers doing business around the world. The automotive industry is crucial to the American economy as one of the largest employers and manufactured goods export sectors.

We’re happy to report that 2013 was an excellent year for the industry! Here are some highlights:

It’s clear this industry is running on all cylinders! We expect continued success for American businesses in this sector, so contact your nearest Export Assistance Center if you’re ready to bring your automotive products into the global market.

Our Global Automotive Team has specialists throughout the country and at US Embassies and Consulates in 72 countries. We are ready to help your company achieve its export goals.

Be sure to follow our team on Twitter @cs_autoteam to learn more about our automotive industry initiatives, upcoming events and other updates.

This week Commerce Secretary Penny Pritzker announced the Look South Initiative, a movement to help American businesses leverage the Free Trade Agreements the United States shares with 11 countries in Latin America.

The Initiative is an important new part of the Commerce Department’s Open for Business Agenda, supporting American companies looking to increase their global presence.

More and more businesses are exporting, which is leading to record levels of exports for the country. That supports the U.S. economy, and it helps create jobs here at home.

However, most companies that currently export are only taking advantage of one market. Companies exporting to one market average roughly $375,000 in export sales. For a company exporting to two-to-four export markets, that average nearly triples to $1 million in sales. It’s clear that exporting to additional markets improves a business’s bottom line.

For businesses looking to expand their export markets, “Looking South” is a simple way to start. More than half of our free trade agreements are in Latin America, which generally equates to greater ease in entering those markets. Tariffs are low if they exist at all, which can mean a lower cost of doing business.

The best news of all is that we have your back. The entire Department of Commerce is backing this effort along with the International Trade Administration (ITA), the State Department, the Small Business Administration, the Export-Import Bank, Department of Agriculture, the Overseas Private Investment Corporation, and the U.S. Trade and Development Agency.

Here are some ways for you to be a part of the movement:

Check out ITA’s Trade Winds – The Americas event in May to connect to a world of opportunity in the Americas. Our Commercial Service team will support you through a series of business-to-business meetings in Colombia, Panama, Chile, Ecuador, and Peru.

Visit export.gov/LookSouth to learn about federal resources available to support you. The site features research on a number of markets and industries, and provides tips about doing business in Latin American markets.

From June 1 to June 5, I had the opportunity to lead a group of U.S. business executives on a trade mission to Santiago, Chile and Lima, Peru. The mission was comprised of executives pursuing business opportunities across a wide range of manufacturing and service sectors. The results were impressive.

Chile and Peru were selected as target markets for a variety of reasons, including market potential and ease of doing business. These factors were enhanced by the existence of free trade agreements each has with the United States. Besides the eventual elimination of all tariffs on U.S. products entering these markets, these agreements establish clear and transparent rules for the conduct of business with U.S. firms. These agreements have worked. In the case of Chile, U.S. exports in 2008 were up 49.4 percent over the year before and in Peru, U.S. exports were up 51 percent over the same period. U.S. exports to Chile are up 345 percent since 2004 when the agreement went into effect. Last year, Peru was the fastest growing export market in the Western Hemisphere.

Daycare center funded by U.S. companies and United Way Chile. (Department of Commerce photo)

The heart of the mission is the business matchmaking service provided by the U.S. and Foreign Commercial Service in both countries. Each company had appointments each day with prescreened local companies. The mission participants also had the opportunity to meet and talk to members of the U.S. and local business communities at events hosted by the embassies. The days were full. Meals became business meetings. The business days lasted well into the night.

Chris Hood of Coastal International Logistics, LLC, noted that his business philosophy was to “be brief, be bright, be gone.” He had a contract before leaving the first stop. He and the other mission members seemed to adhere to the same philosophy and contributed to a highly successful trade mission.

While mission members were busy developing new clients and pursuing commercial opportunities, I met with government officials to pursue issues which would further enhance the competitiveness of U.S. firms in these markets. I met with customs officials, economy and energy ministers, business groups and NGOs. I also visited examples of U.S. corporate social responsibility and highlighted the value of partnerships with the U.S. private sector.

The mission was truly representative of a public/private sector partnership. In the end, the public and private sectors accomplished their mutual objectives of contributing to the economic growth of the United States and creating U.S. jobs through exports.